01 The problem
Nicole’s business accumulated $300,000 in tax liability that she was never able to pay. After necessary living expenses, her income left no room for a monthly payment. At this balance, the IRS can levy bank accounts and income.
02 The resolution
An installment agreement would have required monthly payments she couldn’t sustain. An Offer in Compromise requires a payment based on income and asset equity, which made it a weaker fit for her situation. CNC, also called hardship status, applies when paying would prevent a taxpayer from covering basic living expenses. We documented her income, expenses, and assets in a full financial statement and submitted the hardship request.
03 The result
The IRS granted CNC status. Nicole has no monthly payment while the account remains in CNC, and her collection statute is on track to expire in about four years. If the statute is not extended, the IRS’s authority to collect the remaining balance ends at that point.